Singapore No. 1 For Millionaires – Again

The Louis Vuitton Island Maison store at the Marina Bay Sands, pictured at dusk against the skyline of Singapore’s central business district.

Looking for millionaires? Take a drive around Singapore’s residential districts – more than one in six houses you see will be inhabited by one.

The Southeast Asian city-state has retained the honor of having the highest percentage of millionaires in the world, according to a new report from the Boston Consulting Group. Singapore had 188,000 millionaire households in 2011 – or slightly more than 17% of its resident households. Effectively, that equates to more than one in every six Singapore households having disposable private wealth of over US$1 million, excluding property, businesses and luxury goods. If those were included, it would likely push the number of millionaire households even higher, since property in Singapore is among the world’s most expensive.

Bloomberg

A shopper carries a Chanel shopping bag at Marina Bay Sands in Singapore.

The millionaires number has grown 14% since 2010, when Singapore also had the highest percentage of millionaires in the world, according to a similar BCG report.

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Singapore’s über-wealthy population has also grown, with 10 in every 100,000 households now classified as “ultra-high-net-worth” households, defined as households with more than US$100 million in private financial wealth. That puts Singapore right below Switzerland, which has the highest concentration of ultra-high-net-worth households at 11 for every 100,000, and above Hong Kong which has 7 of these for every 100,000 households.

Hong Kong takes the prize of having the highest concentration of billionaire households relative to its small size, according to the report.

Across Asia-Pacific (excluding Japan), private wealth increased by 10.7% to US$23.7 trillion. Conversely, in North America, Europe and Japan, private wealth declined by 0.9%, 0.4% and 2% respectively, particularly affecting the ultra-wealthy, though North America still has the world’s largest share of private wealth at US$38 trillion.

China is fast catching up with America’s millionaires, and is now host to the world’s 3rd highest number of millionaire households (1.43 million). According to BCG, this number is set to grow over the year 2012, and is already up 16% from 2010.

The report also tracks offshore wealth, with Switzerland emerging, again, as the world’s largest offshore wealth center. However, this position is increasingly being challenged by the likes of Hong Kong and Singapore, according to BCG, especially as calls for greater tax rigor and transparency become louder in Europe and North America and places like Switzerland are compelled to take more steps to regulate incoming deposits.

“If recent growth rates remain constant, it is possible that Singapore and Hong Kong combined will surpass Switzerland as an offshore booking center in terms of size in 15 to 20 years.”

Already, many high-profile wealthy individuals are choosing to relocate to the two port cities, with tax experts crediting this not only to lower taxation rates but the relative ease of filing taxes in Singapore and Hong Kong, and fewer regulatory hurdles.

In 2011, US$2.1 trillion in offshore wealth was held in Switzerland, compared in US$1 trillion in Hong Kong and Singapore combined. In Hong Kong and Singapore, roughly three quarters of this wealth comes from Asia-Pacific. Given that wealth is rising so quickly in Asia, this means the two cities’ roles as private wealth centers are likely to keep growing rapidly.

Indonesia, which is experiencing an enviable economic boom, is also a large contributor to Asia-Pacific’s share of private wealth. A separate report released this May from Wealth-X, which tracks the world’s super-wealthy, estimates that the combined net worth of Indonesia’s ultra-high-net-worth population is at least US$125 billion, with at least 25 Indonesians worth over US$1 billion.

About Southeast Asia Real Time

Indonesia Real Time provides analysis and insight into the region, which includes Singapore, Thailand, Indonesia, Vietnam, Malaysia, the Philippines, Myanmar, Cambodia, Laos and Brunei. Contact the editors at SEAsia@wsj.com.

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